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Commodity Morning View For 23 June 2014

Monday, June 23, 2014

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Bullions:- Gold Drops From Two-Month High as Rally Erodes Interest.Gold fell for a second day on signs that the rally damped physical and investment demand. Platinum declined amid expectations that striking miners in South Africa may return to work this week.Gold completed a third weekly advance last week after the Federal Reserve said it will keep interest rates at almost zero for a considerable time. In China, the world’s largest consumer, volumes for the benchmark spot contract in Shanghai fell for a second day on June 20. Assets in the SPDR Gold Trust held near a one-month low of 782.62 metric tons.“The bias remains for weaker gold prices, with little physical interest from China and investor holdings equally lacking direction,” Victor Thianpiriya, an analyst at Australia & New Zealand Banking Group Ltd., wrote in a note today.

Base Metals:- Copper advanced for a seventh day as a private gauge of Chinese factory output beat economist estimates, boosting demand prospects in the biggest user.The contract for delivery in three months on the London Metal Exchange climbed 0.6 percent to $6,862 a metric ton at 10:56 a.m. Tokyo time. The seventh day of gains is the longest winning streak for copper since Dec. 16.The preliminary June reading of 50.8 for the Chinese Purchasing Managers’ index released today by HSBC Holdings Plc and Markit Economics compares with May’s final figure of 49.4 and the 49.7 median estimate in a Bloomberg survey. Readings above 50 indicate expansion. The country will release trade data for metals later today.
“Today’s Chinese manufacturing data set the direction for copper,” said Tetsu Emori, a senior fund manager at Astmax Asset Management Inc. in Tokyo. “The factory output data was better than what we had expected.”In New York, futures for delivery in September added 0.5 percent to $3.1295 a pound. The metal for delivery in August climbed 1.4 percent to 49,460 yuan ($7,949) a ton on the Shanghai Futures Exchange.On the LME, nickel and lead rose, while zinc dropped. Aluminum was little changed. Tin hadn’t traded.

Oil and Energy:- hancellor George Osborne’s oil price fears over Iraq violence.Britain could provide logistical support for US strikes against insurgents in Iraq, Cabinet minister Iain Duncan Smith said amid reports of a Cabinet rift over the issue.Mr Duncan Smith said “we have got to do what we can” to support the US if Barack Obama takes action against the extremist militant group Islamic State of Iraq and the Levant (Isis).The Work and Pensions Secretary suggested support for the US could take the form of supply and maintenance, but the Government has repeatedly ruled out military intervention by British forces.Last week the US president said he was prepared to take “targeted and precise” action in Iraq, and up to 300 military advisers to help train and advise Iraqi forces will be deployed to the country.